Capital Gains and Taxation

According to Income Tax Act, there are two types of gains from transfer of capital goods, viz.:

• Long Term Capital Gains
• Short Term Capital Gains

Both kind of gains are subject to be included into the income of the transferor.

Taxation of both type of gains is also differently prescribed by the Act. A proper assessment of nature of gains and thus taxability is important here. There are many conditions prescribed which can help the taxpayer save the tax by specific investments. Likewise, losses in the category - inter or the intra head is also allowed on certain conditions. Therefore, one may conclude that not all the gains mean payment of taxes. With our professional advice, you may save on the tax through taking appropriate steps like, making eligible investments, utilization of carried forward losses etc.

What transactions may result in capital gains:

• Disposal, exchange, relinquishment of any rights therein of immovable property.
• Disposal, exchange, relinquishment of any rights therein securities – listed as well as unlisted.
• Disposal, exchange, relinquishment of any rights therein of gold, silver, precious stones, jewellery, archeological designs, paintings.

What we can help you with:

• Assessing nature of asset and type of gain
• Working out period of holding
• Whether transaction is regarded as transfer as per law
• Computation of capital gain/loss
• Assessing correct rate applicable on the transaction
• Valuation
• Deduction/exemption available as per the Act
• Various investment schemes to save on tax
• Correct disclosure in the Income Tax Return